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Oracle Stands Firm on PeopleSoft Bid
If the deal goes through, CEO Larry Ellison originally said he plans to jettison all of PeopleSoft except programmers and development staff.
Posted Jul 2, 2003
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Oracle is continuing its attempts to assure PeopleSoft customers that a takeover would not mean the end of their products and services. Monday Oracle announced plans to embark on an "intensive outreach campaign" to reassure PeopleSoft customers of Oracle's commitment to providing them world-class support and product enhancements for years to come. This comes after the U. S. Department of Justice said it would continue its investigation Oracle's hostile takeover attempt of PeopleSoft by formally asking for more information related to the proposed deal. The "second request" for information from both companies is expected to touch off of a new round of battling between all the parties involved. Observers claim the deal might be wrapped in red tape for months. Oracle will have to announce within the next few days that it plans to extend its offer for PeopleSoft past its self-imposed deadline of July 7. "PeopleSoft has consistently maintained that the proposed combination of PeopleSoft and Oracle faces substantial regulatory delays and a significant likelihood that the transaction would be prohibited," PeopleSoft said in a statement. If the deal goes through, CEO Larry Ellison originally said he plans to jettison all of PeopleSoft except programmers and development staff. That led industry-watchers to speculate that Oracle would attempt to move all PeopleSoft customers to Oracle products. Oracle executives deny that plan. Instead they claim they are committed to support PeopleSoft products and customers. "We are determined to provide PeopleSoft customers with more responsive and global support than they've ever enjoyed," says Charles Phillips, Oracle's executive vice president. "PeopleSoft products will be enhanced and supported, and Oracle will protect and improve the substantial investment PeopleSoft customers have already made." Analysts wonder why Oracle didn't initially take this path. "This is a no-brainer," says Kelly Ferguson, a principle analyst with Current Analysis. "Oracle should have done this from the get-go. When they first announced the takeover bid, the whole way they did it was arrogant and they did not go out of their way to get two key stakeholders on board--PeopleSoft customers and employees."
Oracle's outreach campaign includes beefed up advertising and a commitment to directly contact every PeopleSoft customer. Upon speaking with customers Oracle officials say they plan to assure them of several commitments, including that they will not be forced to move to Oracle products. However, if a customer opts to move, free module-to-module upgrades will be available. Ferguson says this is a good move for Oracle since many of PeopleSoft's customers are still using version 7, and were reluctant to move to PeopleSoft 8 when it was released last year. All this talk of commitment has done little to placate PeopleSoft workers, who fear that the takeover will mean massive layoffs. At the PeopleSoft headquarters in Pleasanton, CA, Tuesday, a grassroots group of employees calling themselves Power to the People wrapped the trunks of 1,800 trees on the PeopleSoft campus with huge blue ribbons. Wednesday, at the company's annual Fourth of July barbecue, thousands of employees are expected to don T-shirts with a message for Ellison that reads "Larry, kiss our apps!" The group is not officially unsanctioned by PeopleSoft executives.
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